Episode 48: Could Australia’s economic outlook be positive?

This past week Joel attended a fund performance presentation on the Australian stock market that raised a number of compelling and positive points for the Australian economy. Listen in for some optimistic insights on the economy now.

As you may know, APRA is consulting with banks on the removal of the 7 per cent serviceability buffer on home loans; and raising the second buffer against the interest rate paid by the borrower by 0.5%. This change will increase the borrowing capacity of the average person by 11%.  That percentage can give the average borrower an extra $100,000 or so in borrowing capacity to move into a higher price property bracket, or to spend on renovations, furniture, homewares, etc. This could be very positive for Australian retailers, financial services, and even materials companies.

However, as it stands, the average Australian household is heavily in debt. Will access to an extra $100,000 worsen the situation? Listen in for insights on household income and repayments in Australia.

This Week’s Investor Exchange Round Table Covered:

  • Interest rates are down, and it’s the first rate cut since August 2016. Listen in for Louis’ take on what the impact of interest rates will be on broader market, the economy and housing.(19:05)
  • Louis shares his advice on cultivating a savings habit, and how to use this good habit to capitalise on when circumstances change, and the smartest way to manage your spending when they do. (26:03)
  • Brett explains the sales value decline in the property market and the flow on effect to anyone looking to sell their house. (32:13)

You Cannot Be Serious:

A 21-year-old male was on the way to meet the parents of his 19-year-old girlfriend, only to realise he had been to the house before. After a rock concert he wound up having a one night stand at the house, with his girlfriend’s mum! Needless to say, the young man bailed on meeting the parents.

Two would-be thieves in Florida cut open an ATM using a crowbar and blowtorch. Only, they didn’t realise they were welding the ATM shut. The two men ran off without a dime.

Listener Questions:

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The Investor Exchange Theme Music: “Happy Happy Game Show” by Kevin MacLeod (incompetech.com) Licensed under Creative Commons: By Attribution 3.0.

Image Source: Reuters/Thomas White